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March 17, 2020

What Comes After the Coronavirus

Summary:

The coronavirus crisis presents us with a “natural experiment.” I wish it didn’t, but it does, and we ought to take advantage of the experimental possibility if we’re to benefit at all from the weeks and months of danger and uncertainty that lie ahead of us. While the near-term focus clearly needs to be on battening down the hatches—taking care of our employees, our families and ourselves—if we can also establish a process for testing and learning, we can better position ourselves and our companies for the world that will exist on the other side.

A natural experiment is one that occurs in nature because it could never ethically be set up artificially. You don’t, for instance, withhold a promising medicine from a control group because you want to see how much worse they do than those who are given the medicine. Probably the most famous natural experiment in recent years occurred in Oregon in 2008, when funds for Medicaid were expanded, but there wasn’t enough for everyone. A lottery determined who qualified, so you had the state’s poor randomly divided into have and have-nots, whose health was tracked over the following two years. Results were less than many had expected: There was no statistically significant difference on physical health measures. But there were significant gains by the haves on mental health and financial security vs. the have-nots. And at least there is real data. (You can read more here if you’re interested.) 

In the case of the coronavirus, the natural experiment comes from the fact that we have to cut back on face-to-face interaction, sharply for a few weeks or more and at least moderately for months, perhaps many months. That will mean the cancellation of many conferences, a drastic reduction in meetings, a surge in remote work, far fewer in-office meetings with clients—and a major opportunity to see how well digital interactions can substitute for physical ones.

Because digital interactions are inherently less costly than physical ones—no more hopping on that plane, checking in to that hotel room, paying that conference fee, for instance—now is the time to test every digital interaction you’ve been considering. Even older clients, who might have assumed they needed a sit-down meeting, are now open to the idea of dealing with you remotely. The choices are, basically: interact via some digital technology or don’t interact at all. 

You can take the next stretch to condition employees, corporate partners/customers and individual clients to the more efficient digital interactions, in ways that weren’t possible previously.

But you won’t want to continue doing everything digitally, because, despite all the futurists touting work from home for decades, there is value to face-to-face interaction. The key is to take an experimental mindset. 

You expected to generate X amount of business at the giant schmoozefest known as RIMS that was just canceled. Well, how much did business, in fact, drop because you couldn’t go? How much do you think various new, digital interactions that you instituted managed to fill the gap? Now compare your lost business against what you would have spent and recalibrate what you’ll do in the future—keeping in mind that benefits can be ephemeral; it’s hard to put a clear value on that chance meeting that maybe leads to business years down the road. 

Calculate how many hours you and colleagues/employees spend in face-to-face meetings. Now, over the next weeks and months, see what you think you lose (if anything) in collaboration/camaraderie by doing those remotely or by not holding them. (When I stepped into an Intel conference room in 1996, during the Andy Grove era, I saw a sign saying that before holding a meeting you were to calculate the per-hour salaries of all those who would attend and cancel the meeting if you couldn’t demonstrate that you’d increase earnings by more than the salary total consumed by the meeting. Smart man, that Andy Grove.) 

Establish metrics for your dealings with customers today, then see how they change once you switch to phone calls, texts, emails, videoconferences, etc. Calculate the difference in costs, too, so you can better decide what the right mix of channels should be once the world returns to normal. 

You can track your own activities, too, especially if you’re now working from home rather than heading into an office. I, for instance, am finding I’m far more productive now that I can’t have sports on in the background while I work. I assumed that, with the sound off, the broadcasts didn’t distract. Well, yeah, not so. Those sports will stay off even when the various seasons resume. (I don’t know if it’s true, but I’ve seen people claim on Twitter that Shakespeare wrote King Lear and other classics while London was under a quarantine for black plague—and note that Julius Caesar wouldn’t have been assassinated in the Roman Senate on the ides of March if he’d been able to work from home.)

My old friend and onetime neighbor Andy Kessler wrote a smart column in the Wall Street Journal on Monday about how stock market crashes can prefigure a major shift in the economy—in his case, following the 1987 crash, the smaller high-tech stocks he covered as a securities analyst for Morgan Stanley moved to the forefront, gradually eclipsing IBM and carrying the world into the Internet age. Sure enough, amid the stock market carnage on Monday, Amazon announced that it intended to hire 100,000 warehouse workers and delivery drivers.

The opportunity to lead in the next phase of the economy is open to all of us, at least to some extent, if we can take a test-and-learn approach even while dealing with all the other craziness. We’re going to suffer through a pandemic and, it increasingly seems, a recession. We might as well get something out of it.

Stay healthy.

Paul Carroll
Editor-in-Chief

P.S. Here is a piece from the Daily Beast that, based on my experience in tracking economic crises, seemed informative. It lays out four scenarios for how the pandemic will play out and, eventually end. 

P.P.S. Here is a link to the first of a variety of educational quizzes at Quizzify.com, run by our friend Al Lewis. I found them informative and interesting. You might try your hand, perhaps even sharing with colleagues. We can all stand to be smarter about the challenge in front of us.

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About the Author

Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.

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